To begin with the playing of chess is regarded by the majority of the Ulama as Haraam. Oherwise Makruh Tahrimi (very discouraged and close to haram) by others. This is due to the stern warnings and prohibitions mentioned in Ahaadith.
Consequently, playing games whether indoor or outdoor has been disliked by Rasulullah SAW except for three things:
1. playing (sporting) with one's wife
2. horse riding (for breeding the horse)
Apart from these games, if a sport or game where there is religious or worldly benefit then it is subject to the following conditions:
1. there is nothing contrary to the Shariah
2. there should be no resemblance with other communities
In addition, the Holy Qur'an has used the words 'lahw' and 'laib' which the Jurists of Islam have made reference to games and pastimes. Primarily, Allah Ta'ala has sent us to this world to worship and remember Him. Therefore our aim must be to please Him.
Commenting on the playing of chess, the Jurists have declared it as haraam.
According to Imam Muhammad RA there is no good in all types of games/play. Although chess is not directly classified under gambling, it is regarded as (useless play).
In the book Al-Basaair it is stated in one Hadith:
"When they pass on those people playing Azlaam, chess, backgammon and similar games, do not greet them; and if they do greet you then do not reply (their greeting)."
So serious is the playing of chess that one is instructed not to make salaam nor reply to their salaam. Rasulullah SAW would sometimes turn his face or not reply to a greeting to show the veracity and depth of abhorrence to a particular sinful act.
Once Saiyidina Ali RA happened to pass by a group of people playing chess and remarked:
"What is this? What are these images for which you have gathered here?"
It is also reported that once when Saiyidina Umar RA passed a group of people playing chess, he remarked:
"Their actions are like those of the idol worshippers". (Ghayatu Bayan)
The statement of Saiyidina Umar RA should be carefully analysed in context i.e. when any act is directly or indirectly associated with a particular culture, religion or community then Muslims are advised to abstain from its affiliation. For instance, Christmas has special religious and spiritual significance to Christians.
Likewise the play of chess has special significance to the kuffaar and therefore identified as a "game" with either cultural or religious connotations.
Aforementioned are a few more Ahaadith on the subject matter:
Abu Musa Asha'ari RA reported that Rasulullah SAW said:
"He who plays backgammon (or chess) disobeys Allah and His Rasul (SAW)."
Sulaiman bin Buraidah RA reported Rasulullah SAW as saying:
"If anyone plays backgammon, he sinks his hand in the flesh of swine and its blood."
Musa Asha'ari RA reported from Rasulullah SAW that:
"He who plays backgammon (or chess) has soaked his hand in the blood of swine."
Rasulullah SAW gave the parable of that person who plays chess and then performs Solat , is like the person who makes Wudhu with dirt and the blood of swine and thereafter performs Solat.